Why rooftop solar plants have not caught on among homeowners

Unless homeowners are offered higher remuneration for the electricity generated, they are unlikely to be drawn to the opportunity presented by solar energy.

Chennai, Dec 21:

Dutchman Toine van Megen, an Indophile who has been living in this country for over 40 years, gets nothing for the electricity he pumps into the grid from his rooftop solar power plant, except for “a nice feeling”.

If everyone could afford to be like the former executive of Suzlon and the co-Founder of Auroville Consulting, the country could have established a vibrant solar rooftop movement by now. Today, industries, educational institutions and commercial establishments, such as shopping malls, are putting up largish rooftop solar plants for a variety of reasons — meeting their renewable purchase obligations, energy security or just social consciousness.

However, very few homeowners have taken to putting up rooftop plants. “You don’t even have to wear glasses to see why – that’s because domestic rooftop solar is just not remunerative under the present schemes.”

Illustrative of the point is the case of Tamil Nadu. The State electricity regulatory commission has proposed a tariff of Rs 8.70 per kWhr for generation from kW-scale (i.e. small) solar plants and if the power is sold to the State electricity utility. At the moment, it is just a proposal.

Otherwise, one could put up a 1 kW solar plant under the State’s capital subsidy scheme, or avail oneself of the State’s generation-based (tapering, six-year) incentive, or just not opt for any subsidy or incentive, which is the only option available if one wants to go in for a system of more than 1kW.

As the tables show, the returns are practically next to just ‘a nice feeling’, and the payback takes long years.

Of course, the situation improves if one assumes electricity tariff hikes. But to counterweight that are a number of assumptions — maintenance costs, generation, the uncertainty and ‘cost’ of getting the subsidies. For instance, in grid-tie systems, the solar plant cannot generate power when the grid power goes off; if you opt for a battery, the costs shoot up.

Pay more, the only option

The only way to entice homeowners to put up rooftop plants is to pay a remunerative price for their electricity, which can taper off over time, says Vivek Jayakumar, of Arbutus Consultants of Pune. Different suggestions have been floating around. Auroville Consulting, for instance, recommends a tariff of Rs 11.50 per unit, fixed for 15 years that will give an investor a return on equity of 15.46 per cent.

The firm has determined that it is possible to defray the additional expenditure by levying a small green cess – 1.08 per cent for the first five years, 1.94 per cent for the second five and 0.26 for the third five.

At the highest domestic tariffs, these translate to a rise of 6 paise per unit for the first five years, 11 for the next and 1 for the third five.

Do this, and you could have 15,000 MW of rooftop solar in the State in 15 years. And that is a nice feeling worth having.

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